Monday, May 27, 2013

Look out, here it comes!

Vanguard June 2013 p. 1
Nick G.

Like the bloody hand that is thrust up from the grave to grab a mourner’s wrist at the end of the horror film Carrie, the supposedly dead, buried and cremated WorkChoices has come back to life.
If the Coalition is re-elected on September 14, it will reinstate the construction bosses’ attack dog the Australian Building and Construction Commission (ABCC), restrict union right of entry provisions, further limit the right to strike, and extend so-called individual flexibility agreements (IFAs).  A Registered Organisations Commission will be established to intimidate and control union officials
through hefty fines and imprisonment.
And still the ruling class screams that this does not go far enough!  “Overly cautious” and “timid” are some of their criticisms of the Abbott-Abetz agenda.
Ruling class divided over tactics….
But Abbott is only following the advice of that faction within the ruling class that had its fingers burnt when workers were mobilised during the Your Rights At Work campaign.


(Above: From one nightmare to another)
They don’t want a big campaign by workers to upset their plans to take away our rights and conditions.

So for the moment, they are content to let Abbott build on measures already put in place by Labor in the Fair Work Act.  These include penalties for industrial action outside of bargaining periods and IFAs.
Abbott’s critics within the ruling class are impatient and want an immediate revival of WorkChoices.
Peter Reith, a former member of John Howard’s Cabinet, speaks for this group.  He derides Abbott’s “bandaid” IR policies as designed “to minimise a union campaign against the Coalition”. 
“Abbott’s policy is basically Labor’s policy,” he complains.
….but united over strategy
These disagreements really only relate to the speed at which an Abbott-led government would restore the essential components of WorkChoices.  There is no disagreement over the direction in which he is heading.
Abbott has signalled that the neoliberal Productivity Commission will be tasked with reviewing the Fair Work Act, and that a further series of IR changes to “boost productivity” and “restore international competitiveness” will be developed in time for the 2016 election.
As for Reith’s complaint that Abbott is just fine-tuning Labor policy, there is, after all, some truth to that.
Both parliamentary parties serve the decisive sections of the ruling class.  They both seek to control the workers so as to maximise the profitability of the huge, mainly multinational, corporations.  The cretinism of the whole parliamentary approach resides in the fact that they merely beg to differ on how best to do that.  Labor’s compromises with the demands of the ruling class simply ensure, as we see in the current context, that there is a basis for the more open attacks to be  pursued by the Coalition.
Build strength by rejecting Liberal and Labor

(Above: Taking the struggle beyond parliament to mobilise the working class)
So yes, it’s on its way.  The WorkChoices corpse has thrust its hand up from the grave.
For some people, this is as scary as the final moments of Carrie. 
They worry endlessly about how bad things are going to get under Abbott.
They despair about the ability of their union or community group to stand up to the threats already foreshadowed by the “timid” and “overly cautious” Abbott.
They lose sleep counting the seats that Labor will lose under a landslide win to the Coalition.
If only such energy from all these good people was put into building a really independent working class agenda through those unions and community organisations!
The days of relying on Labor to defend the people’s interests are gone - if they ever truly existed in the first place.
We are past that.  There is a widespread recognition that we are past that. But the confidence to pursue an alternative through a commitment to struggle outside of the parliamentary arena needs to be built.
It can be built.  It requires experienced and militant workers to take the lead as they did in the Your Rights At Work campaign.
We can’t stay on the parliamentary treadmill, covering the same ground and getting nowhere.
Our independent working class agenda will take shape.  Organisation to pursue that agenda will develop and grow.
And our direction will be as clear as Abbott’s and fundamentally in the opposite direction – towards anti-imperialist Australian independence, democratic working class rights and socialism.


Further reading: (Peter Reith's criticisms of Abbott) 

Labor budget for big business

Vanguard June 2013 p. 2
Jim H.

The core of the Federal Budget delivered by Labor premier Wayne Swan is spending cuts on social programs and increased taxes on the people.

There is an obsession with achieving a large budget surplus by 2015/16 and a $6.6 billion surplus in the following year. A cut of $43 billion has been earmarked for the next four years to bring the budget into surplus.

Spelled out in Swan’s pronouncement is the Labor government’s ongoing commitment to big business. Above  all else, the budget aims to continue the  diversion of national income away from the majority and into the pockets of the small minority of corporate interests.

These interests have been behind the push for massive spending cuts and achieving a surplus  so as to further minimise the corporate sector’s taxation requirements.  It is no surprise that such demands are made in conditions of deepening economic crisis.

As the biggest corporations are overwhelmingly American in origin, the direction pursued by Labor locks us more firmly into the orbit of US imperialism. Australia’s severely curtailed sovereignty  is further reduced.

Labor seeks to do  this in the name of the very people it is betraying – working class Australians.  This year’s budget is more important for what it aims at, than for the scope of the immediate cuts. It does not make it any less important, when  considered in the longer term perspective.

Given  the direction it is taking, Labor  almost guarantees its own  parliamentary defeat. It also prepares the ground for even worse under the Coalition. They will simply build on Labor’s approach to intensify the burdens placed on the people.

Key budget measures

Quite a bit of noise has been made about helping empty nest older Australians to downsize their homes. This is all very good, but the reality is that the $12.4 million housing incentive is so restrictive in the fine print that not many will be able to take it up. Exemptions from tax on property sales stop at $200,000 and the owner must have lived in the property for at least 25 years. There is more smoke and mirrors here than substance.

New expenditure on the health system will be minimal. Some Medicare-subsidised items are to be reviewed however. There is some extra funding for disability services. That is positive. Overall health expenditure remains far short of what is required to overcome the many shortfalls of the existing, underfunded system.

There is some new funding for schools. While there is some top up for disadvantaged students, the proposed funding arrangements ensure that the elite private schools retain their privileged positions. Australia is unique among the OECD countries in using government funds to pay for private education.  It is a nonsense, and the new funding arrangement, if adopted, continues to enshrine it. Instead of hitting mining and the banking sector with realistic levels of taxation, Labor takes funds from universities to pay for school funding!

A billion dollars is to go from renewable energy and environmental programs.

Permanent jobs in the Department of Human Services will be slashed by 2400 and replaced by casual and  part-time workers.  As a result, the range of Centrelink, welfare and child protection services will be compromised.

Farmers will be hurt with the minimal $99.4 million Farm Household Allowance to support farmers in hardship under National Drought Program Reform program. But this funded by cuts to the Caring for our Country program. Natural resource management and the expansion of sustainable farming are inevitably weakened.

Some cuts to tax offsets that affect ordinary people will be scrapped, such as the medical expenses tax offset, which will only remain available for taxpayers for out of pocket medical expenses relating to disability aids, attendant care or aged care expenses.

The Government is also restricting work-related self-education expense deductions, putting an annual $2000 cap on these expenses from 1 July, 2014.

This is the gist of this year’s Federal budget.
The problem is that under capitalism, we will have a government of big business, regardless of whether it wears the Labor or Coalition colours. A government of big business is not prepared to and cannot do other than what we are seeing at present. The Australian people have good reason to demand differently and work to force through whatever concessions they can.

Ultimately they must put to rest all such governments by imposing their own political power to achieve anti-imperialist independence and socialism.


Further reading:

Ford pulls the plug

Vanguard June 2013 p. 3

From this.....
As Vanguard goes to press, the Yankee boss of Ford Australia announced last week that the company would cease manufacturing cars in Australia in 2016, closing down the large plants at Geelong and Broadmeadows in Victoria, and tossing 1200 workers onto the scrapheap. this!
Thousands more jobs in industries and services directly and indirectly dependent on Ford will go as crisis bites into the nearby communities. Workers from these communities have long been at the core of the manufacturing industry in Australia, highly skilled and reliable. Now many face an uncertain future with few prospects of picking up work.
So, after nearly 100 years of making cars in Australia, why has Ford pulled the plug?
For decades their production lines have operated at a good profit, thanks to the surplus value exploited from their workforce, along with regular injections of millions of Australian taxpayer dollars handed over by weak or intimidated governments. In fact, Ford has screwed billions in government subsidies over the years.
In the last few years, the economic crisis of global monopoly capitalism has hit the company’s rate of profit. The bosses in Detroit have decided to prune back. Stuff the small Australian market! Stuff their workers! Stuff their unions! It’s cheaper to build cars in Asia!
Capital always flows to where the rate of profit is better – in many Asian countries workers can be exploited over longer hours, with lesser working conditions and fewer rights and protections. They work in huge modern plants that spit out motor vehicles at a faster rate than the older and smaller factories in Australia. Ford plans to increase its sales into the Chinese market, with partnerships with Chinese companies as well as its own expanding manufacturing plants.
What a rebuke to the grovelling politicians who try to convince us that ‘globalisation’ and foreign investment are the only things that will save Australia! That imperialist domination is good for us?!
If the US-driven ‘free trade’ TPP deal is signed off, other Australian industries and services will be cherry-picked by foreign corporate monopolies, squeezed dry, and then discarded when something more profitable comes along.
Key industries, such as car manufacturing, should be nationalised. Our workers have the skills and energy to transform these plants to produce fuel efficient and electric cars and vehicles suited to Australian conditions, as well as trains, trams and buses for a rapid expansion of modern public transport. Not only would national planning and production meet the needs of the people, it would increase the diversity of the component supply industries and bring greater security for all workers.

This is a practical alternative to just rolling over and copping it.
It would be a significant victory in the struggle to win national independence from the claws of imperialist domination.
Further reading:

Opel, the German partner of General Motors, announces a plant closure last December.

Watch this video of a new bus design from China. 
It gives a new dimension to “smart manufacturing” and shows what’s possible regarding utilisation of design, engineering and production skills that exist in Australia.

Melbourne commuter transport crawling to a halt

Vanguard June 2013 p. 3
Bill F.

The B-grade cult movie The cars that ate Paris featured a scary looking Volkswagen covered in spikes terrifying and intimidating the inhabitants of an Australian country town.

Much more terrifying and intimidating is the prospect of huge B-triple semis hurtling along most of the duplicated main roads, highways and free/tollways of Melbourne, yet this is what has been agreed to by the Federal and Victorian governments.

These monsters are equivalent in length to eight sedan cars, and weigh anything up to 80 tonnes. Changing lanes near to or overtaking large trucks is hazardous enough without one of these behemoths suddenly filling your rear view mirror.

It’s all about moving long-haul freight between the large distribution centres in the capital cities, ports and regional cities, generally places already served by rail lines with yards and terminals already equipped to handle container loads.

Why does this long-haul traffic have to go by road when rail could easily handle it and remove many thousands of large trucks off the road network, thereby easing the current chaos and congestion and making travel safer for everyone?

The answer is both simple and complex. The simple answer is that while it might be a sensible, rational thing to do for a government concerned about the quality of life for its citizens, it would restrict the ability of the capitalist class to turn a profit from all sorts of ventures associated with road transport – roadwork repairs, fuel, tyres, transport, insurance, accidents, legal costs, etc. There is much less scope for this activity with rail transport and the profit margins are less.

Hence we see massive investment in roads and minimal investment in rail traffic. The national and state railway networks are starved of the necessary funds to upgrade tracks and signalling systems beyond that needed to facilitate the movement of coal and grain trains and some regional passenger services.

The complex answer relates to the realisation of surplus value.  The labour power of workers, which is never paid at its true value by the capitalists, embeds each commodity with a surplus value which is, in turn, the source of industrial profit.  However, the commodity must be sold for its surplus value to be realised, and any delay in the sale, any extension of the time that it remains in circulation before profit can be drawn from it, places the producer at risk of having to get by on credit, with all the risks and additional costs that this entails.  The speed of road transport, including the smaller amount of handling required to get from manufacturer to retailer or direct consumer, makes road transport the preferred option for many capitalists for movement of commodities.

Melbourne’s East-West Road Tunnel

No surprise therefore that the Victorian government under Premier Napthine has budgeted $294 million for work to start on the East-West road tunnel, bolstered by the promise of Tony Abbott that an incoming Liberal government would commit $1.5 billion of taxpayers’ money to the project. This money has been committed in spite of no ‘business plan’ having been submitted to Infrastructure Australia.

Napthine says that construction of the road tunnel would ease commuter traffic congestion, but this will do little for the major bottle-necks around West Gate and Bolte bridges. As yet details and locations of on/off ramps have not been released, but there is an expectation that these will dump even more traffic into the CBD area.

However, it seems the East-West road tunnel is primarily designed to move large trucks, including B-triples, to and from the South Eastern semi-industrial suburbs and the recently announced construction of a major new deep water port terminal at Westernport. Don’t be surprised if another refinement is the creation of ‘trucks only’ lanes, for ‘safety reasons’ but really to ensure that pesky motorists can’t break up fast moving truck convoys.

Metro rail tunnel

Labor has backed the Metro rail tunnel as a priority and this would certainly achieve a good deal in relieving the congestion for commuter traffic on both rail and road. However, their commitment is on the never-never, $44 million for planning now, with little else until 2019, in spite of Infrastructure Australia saying it was “ready to go”.

The anarchy of capitalism

The current mess simply reflects the lack of rational planning where ‘market forces’ determine what is built, how it operates and who benefits. The needs of the people and society as a whole come second to the amassing of profits.

Big business doesn’t care if hundreds of thousands of workers and school kids have to spend hours getting to and from work or school, if trains run late or are cancelled. “That’s your responsibility – catch an early one to be sure! Don’t be late again!”
Vanguard June 2013 p. 4

Commemorating 50 years of Vanguard

First published in September 1963, Vanguard celebrates its 50th anniversary this year.

Over the next 6 months we will publish an occasional series of articles from some of our earlier editions.

They will deal with those issues which confront us today, such as parliamentarism, trade union politics, and the Labor Party.

They are issues which will no doubt confront our successors 50 years from now.

Notes will be appended to explain some historical references.  The highlighted passages are as they appeared in the original article.



(From Vanguard Vol 3 No 47 December 1966)

The Federal election[1] will cause every advanced worker to think over the whole nature and purpose of parliament and parliamentary elections.

There can be no doubt that there are very deep-seated illusions about parliament.  These illusions take the form of belief that parliament is really the place where Australia’s destiny is determined.  It is very important to analyse this.

In all the so-called democracies, the capitalist class has succeeded in deluding many people into the belief that parliament is really a democratic institution.  It has deluded people into thinking that by voting in a parliamentary election they have a stake in the government of the country.  They have deluded people into believing that parliament is responsible to the people, and that cabinet is responsible to parliament and thereby to the people.

All this is carefully fostered and developed.  It has a very long tradition.  It is part of the ideology of capitalism.

The result is that parliament is largely considered as the boundary of politics.  Put in another way, the capitalists have placed a ring of parliamentary politics around the people.  It has nurtured and developed the illusion that outside that ring there are no politics.

Accordingly the capitalists centre all their comments on parliament and its doings.  They comment on the parliamentary personalities.  They analyse the cabinet.  They analyse the opposition. They broadcast parliamentary debates.  They create a sea of parliamentarism.

In election times they give immense publicity to the campaigns of the parliamentary parties.  Day in and day out the picture is painted of the fate of the nation being decided.

The government leaders seek a “mandate” for this and that.  The opposition makes all sorts of promises to the electors.  They too seek a “mandate”. The revisionist group[2] joins in this witch’s brew.

All this helps to concentrate attention on parliament.  It all helps to perpetuate the illusion that it really is parliament that it important.

At election time the electors are wooed. They are said to be the important people.  It is they who are making the choice, so it is said.  They are deciding on the government.

When one party wins it is said that it has secured a mandate from the people for its policies. The other side says the people have spoken. The revisionists set out to campaign for the next election. The labor party says it will go on campaigning.

Then the comments turn on who will be the next leader of the labor party of what changes will be made in the cabinet. The legislative programme is talked about. It is said that there must be an effective opposition. Or that the Liberal Party-Country Party alliance must be preserved.

All of it is concentrated on parliament.  All of it is carefully designed to rivet the attention of the people on parliament. It is designed to create the illusion that only through parliament can anything be done. If this is successful then the people do not step beyond the “safe” confines of parliamentary politics.

People must ask themselves a critically important question.  Is this business about parliament the reality of Australia?  Does parliament really occupy this position?

The answer is that reality is quite different.  Parliament is a capitalist institution. If we look beyond the surface this is clear.  Monopoly capitalism remains. Exploitation remains. Profit remains.  Everything is really determined by this.

The decisive issue before Australian people today is the Australian-US alliance and all its implications including Australia’s participation in aggression against Vietnam.  The Australian monopolists are tied body and soul to US monopolists.  On this matter no single parliamentary candidate or party had any view but support for the US alliance.  Part of parliamentary politics is to create the illusion of two different parties and even differing views within the parties. This is democracy, so they say.  Hard reality is that on this really central and critical question there was and is no difference.

Those who are disappointed in the labor party’s performance will tend to say if Whitlam had not been guilty of treachery,[3] the result might have been different.  The “left” will say we must get rid of the right.  The “right” will say we must get rid of the left.  But all this is really subordinated to and part of parliamentary politics. It is part of the illusion. It is part of the deception of the people. It will solve nothing. The centre of the matter is still the US alliance.  It is from Australian capitalism’s satellite position to US imperialism that everything else follows.  Reality is that Holt, McEwen, Calwell, Whitlam, Cairns, without a single exception (but with a few verbal differences) all support Australia’s satellite position to US imperialism.  The revisionist group supports the ALP.

Whatever question is taken, parliament’s position remains an illusion of people’s power and democracy. Reality is that it is nothing of the sort. Reality is that real power in Australia rests with the Australian-US-British monopoly capitalists. They use parliament.

US imperialism has only to crack the whip and the Australian ruling class follows.  As soon as Australia became tied to the US war chariot (as it has been by liberal and labor alike), it had to go where the US war chariot went.

The illusions in parliament go very very deep. In the best Marxist-Leninists pangs of disappointment and frustration occurred when the labor party was defeated.  While professing their lack of illusions in parliament and the labor party, still they suffer disappointment. This is a tribute to the capacity for deception of the capitalist class.

Our task must be to cast away all these long-cherished illusions.  They must be cast aside altogether. Only in that way can a correct tactical approach to parliament be worked out.

Parliament is important precisely because it deludes people; indeed, only because it deludes people.

The problem is how to dispel these illusions.  They cannot be dispelled overnight.  It is a relatively long term operation. Basically, people’s own experiences will be the only way by which they will shed their illusions.  Already a healthy cynicism exists about parliamentary politicians. We must draw correct conclusions at every stage of political struggle.  Genuine politics extend far beyond parliament. It is but an incident in real politics. Politics have to do with the struggle of the workers and working people against the capitalists, Australia’s place in the world, US imperialism, war and peace. The people must take things into their own hands.

What is decisive is the people’s struggle.  This has been said many times.  But it is a matter far beyond mere words.  It goes on and will go on irrespective of parliament.  It is an anti-US imperialist struggle in line with the mainstream of world development.

Australian people will develop it irrespective of parliament, parliamentary politics and politicians.

The ruling class is already alarmed about this.  It is fearful that Holt’s majority is so large it will make parliament a mockery. It is fearful that the labor party is destroyed as an “effective” opposition. Melbourne Herald on November 28 ran a main feature article headed “For the sake of parliament…Danger in big poll win”. In the text it said in heavy type: “The danger is that Parliament’s authority could slip further”. Side by side with this it speaks about suppressing demonstrations, controlling electoral meetings, the “rabble” and so on. Thus the ruling class is quite conscious of the danger of the decline of parliament on the one hand and the rise of mass struggle on the other.

The justification for Communists participating in an election campaign is to expose this hard reality about parliament. The slightest concession to the validity of parliamentary politics as decisive must nurture people’s illusions in parliament. Participation in elections to dispel illusions and use of parliament itself for this, are perfectly legitimate. At the present stage, it is not possible to elect Communists to parliament.  The revisionists by their parliamentary policy, their programme, their method of participation in elections and their peaceful transition to socialism[4] develop illusions.  They do so in the name of Communism.  But this sort of thing has nothing in common with Communism.

The Communists participate fully in the struggles of the people in every shape and form. They must tirelessly demonstrate the reality of parliament in actual struggle and experience.  Acting thus they will help the people to overcome illusions about parliament.

So long as the parliamentary ring exists about politics the ruling class can contain and restrict struggle.

In modern times the people are taking matters into their own hands.

Australians will repudiate in action suggestions of Holt’s “mandate” to go ahead with more troops and more conscripts for Vietnam. They will repudiate the US alliance.

No one need feel frustrated or disappointed. The way of struggle is the only way. This is so, be there parliament or no parliament, Holt or Calwell, Liberal or Labor Party.

[1] The Federal election of November 26, 1966 was a landslide victory for the Liberal and Country coalition under Harold Holt.  The Liberal Party won 61 seats in the House of Representatives and the Country Party won 21 for a total of 82 seats for the coalition.  The ALP under Arthur Calwell suffered a 9% swing and won only 42 seats.  It was the largest majority for an Australian government to that time.

[2] The revisionist group refers to the leadership of the Communist Party of Australia.  Under Sharkey and Dixon, the CPA had embraced the Soviet revisionist betrayal of Communism; however, a new revisionist group around Laurie Aarons pushed Sharkey and Dixon aside and set the party on the path of complete liquidation, culminating in the formal dissolution of the CPA in 1991.  Prior to the 1966 election, Aarons proposed a formal coalition of the CPA and the ALP “left”.  The Aarons clique, in its rejection of Communist politics, upheld bourgeois parliamentarism and fed illusions about parliament in the working class movement.

[3] For some time prior to the 1966 election, the ALP deputy leader Gough Whitlam had suggested that the ageing Calwell was unsuited to the task of defeating the younger Harold Holt.  Whitlam and his supporters wanted Calwell to relinquish his position and for Whitlam to lead the party.

[4] The so-called theory of the “peaceful transition to socialism” was one of the cornerstones of the revision of Marxism propounded by Khrushchev. Instead of preparing the working class for the revolutionary overthrow of capitalist state power, it encouraged the illusion that the capitalists would peacefully surrender their power through the electoral process.

Sale of GrainCorp another blow to independence

Vanguard June 2013 p. 5
Duncan B.

(Above: GrainCorp silos att Geelong)

The management of GrainCorp has accepted a $3 billion takeover bid from the US commodity giant Archer Daniels Midland.

This means that another major Australian-owned grain handler will fall into foreign hands. (The deal is subject to approval by the Foreign Investment Review Board.) This takeover means that 75% of eastern Australian grain production and 90% of Australia’s bulk grain exports will be controlled from North America.

GrainCorp has a 30% national market share, 79 permanent grain storage sites, 200 other sites, seven out of the nine east coast grain export ports and a gigantic proportion of the east coast grain handling network.

Archer Daniels Midland is one of the biggest grain businesses in the world. ADM’s processing and sales stretch across 160 countries, with 265 processing plants converting grain into food, animal feeds, cosmetics and pharmaceuticals, industrial products and energy. Last year ADM’s net sales accounted for $US87 billion.

Grain growers have expressed concerns about the possible effects of the takeover. The National Party has come out strongly against the takeover, saying that it is not in the national interest. They have called on the Foreign Investment Review Board and the Treasurer to reject ADM’s bid for GrainCorp.

The only major Australian-owned grain handler left after the sale of GrainCorp will be Western Australia’s Co-operative Bulk Handling, which dominates the grain trade in WA, and has a national market share of about 30%. How long before the vultures start circling CBH?

Multinationals leave growers for dead

SPC Ardmona, which is owned by Coca Cola Amatil, recently informed over 60 fruit growers that the company would no longer be taking their fruit, blaming cheap imported fruit. Many of the growers had decades-long contracts with SPC Ardmona, and are faced with having to bulldoze three quarters of a million fruit trees.

Ten years ago, SPC Ardmona took 50,000 tonnes of peaches and 60,000 tonnes of pears. Now they take about 11,000 tonnes of each fruit.

A rally attended by over one thousand people was held in Shepparton to support Australian farmers and their products (see article page 12).

Meanwhile US multinational agribusiness firm Simplot has told more than 20 Tasmanian pea growers that they will not be taking any more peas for processing this year. This leaves these growers with no market for their crops.

Simplot has annual sales of over $US 5 billion per year, and owns well-known brands such as Bird’s Eye, Leggos, Chiko and Edgell.

A common thread runs through these three stories. In each case Australian farmers are at the mercy of foreign-owned corporations for their livelihoods, which can be taken away without warning. This is another reason for all Australians to support the concept of an Australia free from the domination of foreign corporations. Agriculture in an independent Australia would be carried out for the benefit of producers and consumers alike.

Who controls Australia?

Vanguard June 2013 p. 6
Dennis M.

Who owns Australia? The answer is nowhere near as simple as it used to be.

In 1963, E.W. Campbell summed up under the title The Sixty Rich Families Who Own Australia. Even then, to focus on families was behind the times. Publicly-listed corporations had taken charge.

Today, BHP-Billiton is bigger than ever. It is no longer the Big Australian. It is possible to uncover who owns it. But where is its control center? It is no longer along Collins Street. Even if a project is owned and managed by locals, we still need to know from whom they get their loans.

A hundred years ago, Bukharin and Lenin wrote about monopolising capitals. They referred to this stage in the expansion of capital as imperialism. They pointed to how banks were binding with manufacture, mining and transport. Marxists call this integration ‘finance capital’.

That dynamic is still at work. But there has been a further change in the relations between the productive and the financial. The connections are no longer just a matter of legs under the same table. The financiers do more than get the money together to finance projects. More than ever, they own the other sectors.

When the authors traced the Australian branches of manufacturing companies back to the USA they found that the great majority are owned by finance capital. Only 16% are in the hands of other industrials.

In Lenin’s day, finance capital was not so involved in the ‘making’ of profit. Instead, banks ‘took’ profits that had been realised from surplus value produced in other corporations. That division no longer prevails. The finance houses now buy into the corporations where wage-slaves add value. The financiers know that they cannot all get all of their money by swindling each other.

The latest pattern is called ‘financialisation’. The ‘flight of capital’ is part of what capital needs to expand. Its flight can be from one nation-market-state to another in ‘a race to the bottom’. But capital also has to be free to move between corporations inside a nation-market-state. Money-capital can thereby chase better average rates of profits. The current patterns of finance capital speeds that switching. The crisis intensified the need to do so.

Two Griffith University scholars, Georgina Murray and David Peetz, document the changes in corporate ownership since the 2008 crisis. Their results appear in the winter 2013 issue of the Journal of Australian Political Economy. They show how much more local production is in the hands of overseas finance corporations.

Murray and Peetz base their results from the top 128 corporations ranked by revenue in mid-2010. They track how the patterns of ownership have changed since 2006. They take up three questions. Where are the owners of biggest Australian corporations? How significant is finance capital here? Did overseas finance capital expand here through the crisis?

Key findings include a 13% jump in the US slice. US finance-capital corporates now hold 28 out of every 100 ordinary shares. The UK slice has fallen by 6%. China has 0.2%.

There has been a 5.5% drop in the Australian-owned segment. Before the crisis, locals held Number One spot with 29%. The overseas were then at 27%. That order is now reversed. But in non-financial corporations, the locals are down at 13%. Overseas owners stand at 23%.

In the twenty largest corporations, the fraction held by overseas finance corporations rose from 35% in 2006-07 to 45%.

The increases in overseas ownership are broad and substantial. In broadcasting and TV, it is up by 27%. For health manufacturing and supply, it is up by 19%. In food and other manufacturing, the increase is 15%. By contrast, the overseas slice in transport, utilities, construction and heavy manufacturing dropped by nearly 12%.


The highest rate of foreign ownership is in mining. Miners also account for a third of the total price of all share-market capitalisation among the top firms. Mining saw a 12% increase in overseas ownership, despite the czars. Rinehart, Forrest and Palmer together hold under 5% of the sector. Rinehart gets most of her billions through a troubled joint venture with Rio Tinto.

The finance sector

The slice of finance houses held from overseas more than doubled to 65%. The overseas share among banks went up from 41 to 52%.

In 2006-7, the top five Australian-based finance capital entities held 19% of significant shareholdings. This fraction fell by a third to 13%. By contrast, the top five from overseas grew from 15 to 19%.

The changes inside finance capital are equally striking. Banks dropped back by a third to just 14%. The Commonwealth Bank, for example, slipped from first to third, down from 8 to 4%. Non-bank financial houses shot up from 11 to 23%.


The newcomers are spearheaded by the US Master of the Universe, BlackRock. BlackRock is the world’s largest funds manager. It controls four trillion dollars. In Australia, BlackRock scored 11% of shareholdings by 2010. It bought an arm of the British Barclays bank which held lots of Australian shares. BlackRock CEO, Larry Fink, was a key advisor to US administrations during the bailout. BlackRock itself did not need an injection of funds. Fink is a Democrat. His most valued asset is Obama’s ear.

State power

These numbers add to the information we need to detail who ‘controls’ Australia. Corporations, however, cannot rule by themselves. They need the clout of a state. US finance capital dominates through its political and military links. Washington pushes the Trans Pacific (trade) Partnership as one more weapon for finance capital.

So-called globalisation has not overwhelmed all nation-market states. Rather, global power remains a game of snakes and ladders. The US empire is still able to impose its will on its allies. Iraq is several times weaker than in 2002. Venezuela is much stronger.

Australia has been snaking downwards. The most significant sell-out was to float the dollar in December 1983. Next, Hawke-Keating let in forty firms to speculate on foreign-exchange. One consequence is the high-dollar. It makes other sectors of the economy unable to compete.
More than ever, the independence of Australia depends on realising the needs of working people. Our welfare will be secure only under socialism. The ground for our campaigns is solid. More than two-thirds of Australians object to the level of overseas ownership of mining.

[The Journal of Australian Political Economy costs $24 for four issues, c/- Department of Political Economy, University of Sydney, 2006. The current issue also includes a study of the locals who craft surfboards.]